RUSSIA: Gennady Timchenko, From Oligarch to "Putin's Treasurer"

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Gennady Timchenko is a name that resonates in the world of business and politics, particularly in Russia. He is an enigmatic billionaire who has made a mark with his astute business acumen and, more significantly, his close ties to the Russian government and President Vladimir Putin. 

In this blog post, we will delve into the life of Gennady Timchenko, exploring his early years, the rise of his energy trading company Gunvor Group, his intricate relationship with Russian politics, and his post-Gunvor ventures. 

Gennady Timchenko

EARLY LIFE AND CAREER

Gennady Timchenko was born on November 9th, 1952, in Leninakan, Armenian SSR, which is now known as Gyumri, Armenia. Raised in a time when the Soviet Union was still intact, his early life was shaped by the realities of that era. He pursued an education and began his career, eventually embarking on a path that would lead him to becoming a prominent figure in the Russian business landscape.

His father was in the Soviet Army and served in the Second World War. From the age of 7 to 13 years old, Timchenko lived in the German Democratic Republic, learning German, and also in the Ukrainian SSR. He graduated as an electrical engineer from the Mechanical Institute of Saint Petersburg, in 1976.

One year after graduation, in 1977, he started working as an engineer for the Izhorsky plant in St Petersburg, at the time called Leningrad. The plant specialized in building power generators. It was a state-owned company. 

In 1982, he moved on to work as a senior engineer with the Ministry of Foreign Trade. Six years later, he was promoted to another position as Deputy Director of a state-owned oil company called Kirishineftekhimexport, which was created in 1987 and based at the Kirishi refinery, one of the three largest refineries at the time in Russia. 

In 1991, Timchenko made the decision to leave Russia and was hired by a company based in Finland, Urals Finland Oy. The company's focus was to import Russian oil to Europe. During his employment with the company, Timchenko became a Finnish citizen. 

In 1995, the company underwent a name change and leadership change. It was renamed to International Petroleum Products Oy (IPP) and Timchenko became the deputy, and later on the CEO, of the company. 

In 2000, Gennady Timchenko, along with his partner Torbjörn Törnqvist, co-founded Gunvor Group, an energy trading company that would soon gain international prominence. Gunvor specialized in the trading of oil and oil-related products, carving out a niche for itself in the global energy market. Timchenko's strategic vision and leadership played a pivotal role in Gunvor's success. 

In 2014, Gennady Timchenko made a significant move by selling his stake in Gunvor Group. This decision came just in time, as it preceded his inclusion on the U.S. sanctions list. The sale had profound implications on his wealth and business ventures.

In 2007, Timchenko went ahead and founded the Volga Group (Volga Resources Group) private investment fund. Volga Group holds his Russian and international assets in the energy, transport, infrastructure, financial services and consumer sectors.

REDUT PMC

As examined in our preceding article, Timchenko maintains a robust association with the Redut Private Military Company (PMC). This mercenary organization's primary mission centers on safeguarding the interests of Russian enterprises operating in the Middle East and Africa.

Notably, Timchenko, along with another prominent and equally contentious oligarch, Oleg Deripaska, has been implicated in the financing of this substantial mercenary endeavor. These influential figures have provided resources, including armored personnel carriers, helmets, and bulletproof vests, to support the PMC.

Redut's scope of services for Timchenko encompasses the deployment of specialized personnel, including snipers, sappers, and security personnel. The PMC has been tasked with safeguarding convoys and corporate assets, such as oil production facilities in Syria, in accordance with specific directives. 

TIES TO PUTIN

When discussing Gennady Timchenko, it's important to recognize his strong ties to the Russian government and President Vladimir Putin. These connections have been closely watched internationally and led to his inclusion on the United States' sanctions list. They've also sparked questions about his role in Russia's politics and economy.

Timchenko and Putin have been close allies since the days following the Soviet Union's collapse. During the period when Anatoly Sobchak, the first democratically elected mayor of St. Petersburg, was in exile, Timchenko often acted as a link between Sobchak and Putin.

Some media outlets have called Timchenko "Putin's treasurer," highlighting their close relationship.

However, it's worth noting that Timchenko has publicly stated that while he and Putin have known each other for a long time, this doesn't mean he supports the ongoing conflict in Ukraine or is directly involved in Putin's actions related to the war. This underscores the complexity of his position in this intricate political landscape.

President of the Russia Federation, Vladimir Putin

TIES TO FINLAND AND CITIZENSHIP CONTROVERSY

In 1991, Timchenko relocated to Finland and began working for the oil export company Urals Finland Oy. Some have alleged that this company had connections to the former KGB and used these ties to secure funds for their operations, including personal use. There have also been unconfirmed claims that Timchenko had some association with the KGB, not as an operational agent, but in a wealth management capacity.

In August 1999, Timchenko was promised Finnish citizenship. At that time, language proficiency was not a requirement, but applicants underwent financial checks, a background investigation by SUPO (Finnish Security Intelligence Service), and had to meet certain residency criteria. Interestingly, Timchenko's application was marked as a "fast-track" request and included two recommendation letters, one of which emphasized the importance of Timchenko acquiring Finnish citizenship to the company.

Due to his alleged KGB ties and rapid wealth accumulation, Timchenko ended up on SUPO's watchlist. SUPO was also aware of his connections to the then-KGB head, Vladimir Putin, who later became the Russian President. It remains a question how he passed the background check with this information.

As a condition for acquiring Finnish citizenship, Timchenko had to renounce his Russian citizenship, although it has been claimed that he did this. However, he later managed to reacquire Russian citizenship, making him a citizen of Russia, Armenia, and Finland. This is unusual, as Russia typically enforces a one-citizenship rule unless an agreement is in place with another country.

Matti Saarelainen was the head of the Finnish Foreigner Bureau (now the Finnish Immigration Service) when Timchenko applied for Finnish citizenship. The handling of the process was somewhat unconventional, and the paper trail has been incomplete from the beginning. 

Matti Saarelainen

Saarelainen, who had previously worked for SUPO, denied any mishandling or special treatment in the application process. He was later dismissed from his role at the Finnish Immigration Bureau and subsequently returned to SUPO. 

He then held a senior position at the European Centre of Excellence for Countering Hybrid Threats, focusing on countering Russian hybrid operations against EU and NATO member states, but was dismissed due to sexual harassment allegations. Afterward, he rejoined SUPO until his retirement.

In 2022, SUPO initiated an investigation into the allegations surrounding Timchenko's acquisition of Finnish citizenship and the controversies involving Saarelainen. The investigation into Saarelainen concluded upon his retirement, with no ongoing criminal cases. SUPO stated that they did not find any irregularities in how Timchenko obtained Finnish citizenship following their investigation.

PANDORA PAPERS

The Pandora Papers, which were leaked in October 2021, consist of 11.9 million documents that unveiled the offshore financial activities of numerous politicians, celebrities, and business leaders on a global scale. A consortium of journalists and media organizations conducted an extensive investigation, exposing individuals from various countries and revealing allegations of corruption, tax evasion, and conflicts of interest.

Among the leaked documents, it became apparent that over a billion euros were funneled to Timchenko through anonymous tax haven companies. The transfer of funds occurred in a manner suggestive of corruption and money laundering, methods often associated with the KGB for their financial operations. With this money, Timchenko acquired a significant stake in Novatek, Russia's second-largest gas company.

What the Pandora Papers disclosed was a series of substantial loans exchanged between anonymous offshore shell companies and a firm belonging to Timchenko, registered in Cyprus, during the years 2007 and 2008. This firm, named White Seal Holdings, played a crucial role in Timchenko's investment in Novatek.

Pandora Papers leaks showing transactions between White Seal Holdings and other shell companies

The leaked records revealed that Vidrio Enterprises Ltd, a Cyprus shell company, lent White Seal Holdings a total of $572 million between 2007 and 2008, with repayment dates occurring within a year of the loans. Additionally, in 2008, White Seal received an additional $150 million from another anonymous Cyprus entity called Bodela Holdings. The owners of these two shell companies, Vidrio and Bodela Holdings, remain unknown, and Timchenko declined to provide any comments on the matter.

In 2007, one year prior, White Seal secured a $320 million loan from Lerma Trading S.A., a shell company registered in Panama. In 2015, the U.S. government imposed sanctions on White Seal and Lerma Trading for their alleged association with Timchenko. Notably, Timchenko was also connected to two other shell companies registered in the British Virgin Islands. He was listed as the beneficial owner of Roxlane Corporate Ltd and held a directorship in LTS Holding Ltd.

In 2015, the United States government sanctioned White Seal Holdings and Lerma Trading, asserting that they were "acting for or on behalf of" Timchenko. 

SANCTIONS

In March 2014, in the wake of the forceful occupation of Crimea, the United States Treasury took the step of placing Timchenko on the Specially Designated Nationals List (SDN). This list is reserved for members of the inner circle of Russia's leadership, including Putin's closest associates. Such sanctions involve the freezing of assets these individuals may hold in the United States and prohibit them from entering the country.

Up until 2022, Timchenko managed to evade inclusion on the EU sanctions list, largely due to his Finnish citizenship. However, in 2022, the United Kingdom imposed sanctions on him after his participation in a meeting with Vladimir Putin and other Kremlin-affiliated inner circle members. During this meeting, they recognized the independence of the Donetsk and Luhansk people's republics and deployed troops to these regions. It's worth noting that the UK was no longer a member of the European Union at this point due to Brexit.

On 28 February 2022, in response to the 2022 Russian invasion of Ukraine, the European Union added Timchenko to its blacklist, leading to the freezing of all his assets. A few days later, on 4th March 2022, Italian authorities seized his yacht, named Lena, in the city of San Remo. The yacht was also subject to sanctions under the U.S. list. Timchenko's wife and daughter were also included in the sanctions.

Additionally, Canada sanctioned Timchenko under the Special Economic Measures Act due to his involvement in the war in Ukraine, specifically for Grave Breach of International Peace and Security.

CONCLUSION

Following the dissolution of the Soviet Union, Timchenko and other influential figures rapidly expanded their influence, both within Russia and on the global stage. This expansion not only brought them considerable personal wealth but also strengthened Russia's economic assets and global standing.

Timchenko's strategic acquisition of multiple citizenships proved to be a significant advantage, enabling him to navigate European sanctions for nearly a decade while conducting business without major obstacles. However, in the aftermath of the 2022 invasion of Ukraine, international sanctions were imposed, placing substantial restrictions on his business activities and personal freedoms.

This episode underscores the ever-changing dynamics of global politics and the intricate connection between economic power and geopolitical developments. It emphasizes the importance of remaining vigilant against covert influences and preserving the integrity of international systems. As the world grapples with these intricacies, it remains crucial to uphold ethical standards, adhere to international norms, and collaborate to maintain a global environment built on trust, cooperation, and the preservation of democratic values.

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